Consumer Goods and Retail Industry Aligns on Common Objectives for New Value Chain Collaboration

January 9, 2011
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PARIS — Jan. 10, 2011 — During the past year, executives from across the retail and consumer goods industry have worked together as part of the Future Value Chain initiative to focus on how, through a set of collaborative initiatives, the industry can continue to bring benefits to consumers. This effort was triggered by the rapid changes taking place in society, consumer behaviors, the environment and technology. The executives were clear in recognizing the need for the industry to act differently and to work more collaboratively.

The Future Value Chain program, facilitated by The Consumer Goods Forum together with Capgemini, HP and Microsoft Corp., has produced a new report based on the outcomes of the working sessions. The report, titled “2020 Future Value Chain: Building Strategies for the New Decade,” is published today.

The working sessions that provided the input for the report brought together 200 executives from some of the world’s leading retailers, manufacturers, academics, third-party providers and industry organizations that examined the impact of these changes and defined the strategic objectives on which the industry should focus its energies. The objectives identified were these:

Make our business more sustainable. In 20 years, the world’s population will reach 8.3 billion and this growth will put more pressure on natural resources affecting the cost and availability of ingredients. The industry needs to collaborate to address sustainability in future business practices, particularly as sustainability becomes an increasingly important aspect in consumers’ buying decisions.

Optimize a shared supply chain. Key trends such as increasing urbanization, consumer awareness about sustainability, and the increased adoption of consumer technologies and business technologies will require new and collaborative distribution models and optimized “smart” supply chains where information and assets are shared.

Engage with technology-enabled consumers. One of the specific challenges highlighted is sustaining a dialogue with consumers through their preferred channels and technologies. Consumer buying behavior has been impacted by the use of the variety of technologies in people’s lives, accessible at any time, from any location, leaving consumers more informed about products and services. Companies need to drive greater value by engaging with consumers and maintaining a two-way dialogue to improve responsiveness to their changing needs.

Serve the health and wellbeing of consumers. The overall increased importance placed on health and wellbeing will bring strong pressure on the industry to find new ways to inform and engage consumers, governments and other stakeholders. Achieving this objective requires full industry collaboration and a focus on issues such as product safety and providing healthier choices, with an emphasis on “quality of life.”

The report provides a practical framework for companies and industry associations to align on these objectives and to mobilize on concrete initiatives.

“The trends highlighted in the report underline the need for even more collaboration among all parties in the value chain as we move through these challenging times. We should treat this as an opportunity to urgently act through putting in practice new plans and strategies that better suit the changing needs of our consumers,” said Nigel Bagley, director for Industry Affairs, Unilever, and co-chairman of 2020 Future Value Chain.

“Consumer demands have already increasingly changed in the last few years through the use of new technologies. It is time now to sit down with our industry partners and talk about how, by working together, our industry can better serve the 2020 consumer. We are very excited about what the future holds,” said Dr. Gerd Wolfram, managing director, METRO Group, and co-chairman of 2020 Future Value Chain.

“We have the capability to achieve success for our industry now and in the future,” said Jean-Marc Saubade, managing director, The Consumer Goods Forum. “Through the collaborative efforts from the entire industry and its partners, the industry needs to work closer than ever before, bringing companies together and driving projects and programs through collaborative engagement. It is up to us all to continue to work together to choose a better future.”

200 executives from leading retailers, consumer goods manufacturers, academics, third-party providers and industry organizations participated in “2020 Future Value Chain: Building Strategies for the New Decade.” The report examines the changing trends that will have the greatest impact on the industry over the next decade, outlines a number of strategic objectives being put in place as consumer product manufacturers and retailers build strategies for the next 10 years, and provides examples of tactics that can help the industry achieve these objectives.

About the 2020 Future Value Chain Workshops

In total eight workshops took place between February and September 2010 with different perspectives: two on a global level, one on a regional level (with GS1 in Europe) and five on a country level (Mexico, USA, Netherlands, France and Australia).These workshops proved to be a powerful way to engage, align and mobilize industry executives on a common agenda with global, regional and local relevance. For example, in Australia the workshop team is now working with government to establish the blueprint for a collaborative supply chain. In the Netherlands and Mexico the output from the workshops has become the central theme for those countries’ industry programs. A communication platform developed in the U.S. workshop is now being adapted for global use. And the workshop with GS1 in Europe has resulted in significantly better alignment between national GS1 programs and the global vision.

About The Consumer Goods Forum

The Consumer Goods Forum (CGF) is a global, parity-based industry network, driven by its members. It brings together the CEOs and senior management of over 400 retailers, manufacturers, service providers and other stakeholders across 70 countries and reflects the diversity of the industry in geography, size, product category and format. Forum member companies have combined sales of EUR 2.1 trillion.

The Forum was created in June 2009 by the merger of CIES – The Food Business Forum, the Global Commerce Initiative (GCI) and the Global CEO Forum. The Consumer Goods Forum is governed by its Board of Directors, which includes 50 manufacturer and retailer CEOs and Chairmen.

The Forum provides a unique global platform for knowledge exchange and initiatives around five strategic priorities – Emerging Trends, Sustainability, Safety & Health, Operational Excellence and Knowledge Sharing & People Development – which are central to the advancement of today’s consumer goods industry.

The Forum’s vision is: “Better lives through better business”. To fulfil this, its members have given the Forum a mandate to develop common positions on key strategic and operational issues affecting the consumer goods business, with a strong focus on improving processes in non-competitive areas. The Forum’s success is driven by the active participation of the key players in the sector, who together develop and lead the implementation of best practices along the value chain.

With its headquarters in Paris and its regional offices in Washington, D.C., and Tokyo, the CGF serves its members throughout the world. Further information is available via the Forum’s website: www.theconsumergoodsforum.com.

About Capgemini

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 35 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs over 100,000 people worldwide.

HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP (NYSE: HPQ) is available at http://www.hp.com.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.